Skip to main content
Welcome to
super saver spring
offer ends april 20
save over $140
save over 85%
$0.99
per week for 24 weeks
Welcome to
super saver spring
$0.99
per week
for 24 weeks
// //

A man and woman walk by the Cirque du Soleil Big Top in Montreal's Old Port on March 21, 2020.

Graham Hughes/The Canadian Press

A judge for the Superior Court of Quebec has approved a takeover proposal for Cirque du Soleil from its secured creditors, setting the stage for a potential auction for the insolvent entertainment company next month.

Justice Louis Gouin, who is overseeing Cirque’s bankruptcy protection proceedings in Canada, on Friday approved an offer valued at more than US$1.2-billion from the company’s debt holders. It will serve as what is called the stalking horse bid in the sales process, meaning any rival offer will have to be superior in value.

The creditor bid replaces a previous stalking horse bid made by Cirque’s current shareholders. Those shareholders, TPG Capital LP, Fosun Capital Group and Caisse de dépôt et placement du Québec, would be wiped out under the creditor proposal.

Story continues below advertisement

In addition to the creditor and shareholder proposals, Cirque has received four other non-binding preliminary offers to buy the company, according to the latest report from its court-appointed monitor, Ernst & Young.

Cirque’s financial advisers have set up an electronic data room for prospective buyers to view financial information and Cirque management has held virtual presentations for them in recent weeks, the report states.

Quebecor Inc., the Montreal-based telecom company, had expressed its interest in Cirque, but on Friday issued a news release stating it has pulled out of the process. The company “held lengthy discussions with the creditors’ advisors, Houlihan Lokey, until it was forced to end them by signing a non-disclosure agreement, at the request of the Cirque du Soleil,” it said without explaining why such an agreement would be inappropriate.

Pierre Karl Péladeau, Quebecor’s controlling shareholder, has publicly criticized the way Cirque has been managed over the years and had positioned Quebecor as a potential saviour for the circus troupe. The company said Friday it “remains eager to contribute to the Cirque’s turnaround and to leverage its experience, capital and Quebec identity to do so, in cooperation with the creditors.”

More than two dozen potential bidders signed confidentiality agreements to win the right to examine the financials of the cash-strapped company in the preliminary stages of the process, a source close to the proceedings has said.

Among them were U.S.-based investment banking firm Goldman Sachs Group and Feld Entertainment, a U.S.-based live show production company that began with the now-defunct Ringling Bros. and Barnum & Bailey Circus. It was not immediately clear whether the two companies were still in the mix.

The Globe has agreed to grant the source confidentiality because they were not authorized to speak on the matter publicly.

Story continues below advertisement

Guy Laliberté, founder of the Cirque du Soleil, said in May he would jump into the battle for the company and was in talks with undisclosed partners on a bid. On Friday, a spokeswoman for Mr. Laliberté did not provide any further information about his intentions.

Under the new stalking horse bid, lenders would inject US$375-million in new money into Cirque on top of what they are owed, according to Ernst & Young’s latest monitor report. Cirque’s debt would be reduced to US$300-million from US$1.1-billion as the creditor group takes full ownership.

Creditors have agreed to keep Cirque’s international headquarters in Montreal for at least five years. They also committed to setting up a US$15-million fund to pay laid-off employees and another US$5-million for contractors, according to the bid document. There is no government money in the proposal.

The creditors include Toronto-based Catalyst Capital Group Inc. and U.S. debt funds such as CBAM Partners, BlueMountain Capital Management LLC and Thomas H. Lee Partners. The group is owed most of Cirque’s secured debt.

Under the rules of the restructuring process, bidders now have until Aug.18 to submit fully funded offers that are a minimum of US$1.5-million higher than the creditor bid. If no other offers are received, the creditors will win control of the company.

Justice Gouin on Friday declined a request made by a lawyer for a group of second-lien lenders to extend the current sales process by two weeks, saying all interested potential bidders are already engaged in the process and have started their due diligence on Cirque.

Story continues below advertisement

“I will not stop the exercise,” Justice Gouin told participants in a hearing. “The train is going on and I won’t stop it.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies